Current State of TOPS Program Funding

The Louisiana Legislative Staff prepared a status of the TOPS Program based on recent legislative activity. I hope you find it informative. The Legislature has not completed the budget process; in fact, the Senate is just now getting started on the budget. So the status of TOPS and how much funding it will receive has not been decided yet.

FROM LEGISLATIVE STAFF ON MAY 20, 2016

Overview:

The Taylor Opportunity Program for Scholars (TOPS) provides free in-state tuition for over 51,000 higher education students who earned at least a 2.5 grade point average in the required high school curriculum and an ACT score of at least 20. The program, which originally cost about $35 million a year, is expected to cost almost $300 million in the 2016-2017 school year.

The cost of the program has skyrocketed over the last 8 years as colleges and universities have increased tuition to try to offset a 50% loss in state funding during tight state budget times. Under the existing program as tuition goes up, so do the TOPS awards.

The problem is we continue to have state budget issues. The state is facing a $600 million budget shortfall for the coming fiscal year which begins in July. As a result the governor’s proposed budget set aside only $110 million for the program or $183 million short of the money needed to pay for the tuition-free program. The House upped the state funds available for TOPS to $164.9 million, but that is still about 25% short of the dollars needed to fully fund the program. Additionally, the way the House-approved budget proposes to fund TOPS may not be feasible.

While lawmakers continue to look for ways to properly fund the program and the governor is calling for a special legislative session in June to look for new revenue sources to pay for TOPS, legislators are also examining proposals to try to preserve the program for future TOPS students and to equitably allocate the available dollars for TOPS when funding is short.

Preserving TOPS for Future Students:

Legislators have approved and the governor has signed into law Senate Bill 174 (Act 18) which sets a minimum amount that the state will pay each qualified TOPS student. The minimum amount to be paid is tied to the amounts students will receive for the 2016-2017 school year.

TOPS awards will no longer automatically increase if higher education institutions increase tuition. Legislators can choose to increase the minimum, baseline TOPS awards in any year if funds are available.

This is an effort to stabilize the cost of the program going forward. Controlling the costs associated with TOPS is vital to ensuring the program will still be available for future Louisiana high school graduates.

Equitably Allocating Available TOPS Dollars:

Under the existing program when there is not enough money to fund TOPS, certain students are eliminated from the program starting with those who have the lowest ACT score and the highest ability to pay for college without the scholarship program. At the House-approved funding level, it is estimated that only those students with a score of 22 or higher rather than a score of 20 on the ACT would qualify for TOPS in the coming school year, eliminating the tuition payments for an estimated 13,000 qualified students.

As an alternative to that method of dealing with a budget shortfall, the Senate has approved Senate Bill 470. This bill would allow a pro-rata reduction in all TOPS award for all students, with the approval of the Joint Legislative Committee on the Budget. In other words, everyone who is qualified to receive TOPS would get something. The pro-rata reduction would apply to the tuition payment as well as the stipend provided to students who earn the TOPS Performance and TOPS Honors Awards. At the House-approved funding level, TOPS awards would be reduced by about 25%. If the joint budget committee does not approve the pro-rata reductions, the existing method of reducing the number of TOPS recipients kicks in.

Students who opt not to accept the TOPS awards at the reduced level will not lose their eligibility for the program as long as they complete their eligibility within 5 years of the awards being reduced. Higher education institutions have the option of granting waivers to students who cannot pay the full tuition amount without TOPS.